Weekly Report - 17 January 2019 (WR-19-02)

TRACKING TRENDS

MEXICO | Inflation. Monthly inflation in December was 0.70%, bringing the 2018 inflation rate to 4.83%, the national statistics institute (Inegi) reported last week. This compares with a monthly rate of 0.59% in December 2017 and annual inflation of 6.77%. The fall in inflation in 2018 brought the rate back to the central bank’s long-term target of 3% +/- one percentage point. The high inflation rate in 2017 was caused by the so-called ‘gasolinazo’ or sharp increase in domestic fuel prices decreed by the government in January of that year. Then-president Enrique Peña Nieto (2012-2018) and his administration raised fuel prices following the liberalisation of the sector. However, since the start of the year, President Andrés Manuel López Obrador has said that his government will not increase fuel prices to avoid stoking inflation and to reduce the cost of living.